web analytics

Bad brew

Written By: - Date published: 1:52 pm, December 18th, 2009 - 31 comments
Categories: tourism - Tags:

If a tourist buys something in New Zealand for export or that they don’t take possession of within New Zealand, they can get a GST refund on it. Most tourists don’t know this and it’s only relevant in exceptional circumstances, not for the kind of purchases that most tourists make while here. Cameron Brewer from the Newmarket Business Association wants us to make it easier for tourists to get GST refunds on a whole range of purchases.

So, basically Brewer wants the New Zealand government to run a system to give tourists money as they leave the country. Why is that in the country’s interest? Why is it worth the expense? All it does is take money out of our government’s coffers and give it to tourists who are on their way out of the country.

Brewer says that when Australia introduced an easy system for GST refunds in 2000 tourist spending in the country jumped 8.5% that year. He seems to think this was caused by the refund system. That’s dumb. 8.5% is a typical year’s increase that can be totally accounted for by increased tourist numbers, increased tourist wealth, and inflation. It has nothing to do with GST refunds.

Brewer also claims “most New Zealanders have experienced” the Aussie system, which is ridiculous. Most Kiwis haven’t been to Aussie in the last decade, and few that have would have bought a good worth over $300 and had the receipt ready when they left the country to get the refund if they even knew about it. It’s just a bonus for rich tourists. Some money back in the pocket when they’re already leaving the country.

Brewer seems to think that if tourists get a GST refund when they’re leaving New Zealand, they’ll spend more money earlier, in the country. Why he thinks that would happen, and why he thinks that is good I don’t know. Even if the tourists were to spend all their GST refunds in NZ before receiving those refunds (which is patently absurd) the country would just be worse off – we will have given the tourists more goods and services in exchange for the same amount of money entering our economy.

Finally, there’s this sentence, which sums up the intelligence of the man:

“Suddenly in the eyes of tourists every piece of New Zealand jewellery, sizeable artwork, or designer fashion garment is effectively 12.5 per cent cheaper”

No it’s not you drop-kick. GST is one-eighth on, one-ninth off. GST adds 12.% to the purchase price, so a GST refund takes 11.1% off the price. This munter is head of the Newmarket Business Association, remember, and he doesn’t even understand how GST works.

31 comments on “Bad brew ”

  1. gitmo 1

    He is indeed a moron – perhaps he should be invited to post a few articles on the standard

    • lprent 1.1

      He sure is a munter. I don’t think he’d be acceptable here or even at KB. More like No Minister level I think. Ask Gooner.

      It is pretty stupid…. Somewhere in there is a rationale for NZ (ie not just some retailers at the airport past customs). But I read the link and I still can’t see what it is.

  2. grumpy 2

    I have experienced this in a number of countries. goods for export are exempt GST, so goods purchased by tourists to take home with them come under that definition. In NZ you can do it but it’s very difficult as Customs facilities are not geared up for it. In Australia it’s quite easy but at Heathrow there is a special counter and the queues are so long it’s hardly worth it. The only place I have gone all the way for a refund is the Czech Republic.

    To get the refund you need to physically show the items you have got a special VAT (GST) receipt for. For example, you could buy a camera at a Duty Free shop at the airport or buy one on Queen St and the net cost is the same under the GST refund scheme.

    • Richard 2.1

      To do the equivalent thing in Singapore you need to have a receipt and present the item to customs at the airport.

      This means that you have to make the claim *before* you check your luggage in and get your boarding pass — which means arriving at the airport early etc. The hassle means that it’s hardly ever worthwhile — which is possibly the point of the hassle.

  3. zelda 3

    Interesting work history, he went from working for Banks ( paid for by ratepayers) who then worked for Hide ( paid by taxpayers) then the current gig where he styles himself a CEO of a 2 person office ( all paid for by ratepayers again)

    • sweetd 3.1

      Seems like you have an issue with people that have only ever made a living by sucking off the public tit. Interesting blog to make that comment on. Might I introduce you to the former pm Clark, former deputy pm Cullen, and current opposition leader Goff.

  4. BLiP 4

    The US – well California, Washington DC, New York, and Illinois that I know for a fact – have a really simple solution – the tourist just shows their passport, the clerk scans it or takes down the number, and, voila, any sales tax is removed. This works really well on big purchases but you’re just pissing people off if your doing it for small items.

    • Lanthanide 4.1

      This works in the US because their sales taxes are very different to what is used in NZ. Sales tax varies from state to state, and item to item, even sometimes in the way in which you use an item (dine-in restaurants attract sales tax in some states, take-away doesn’t, so the same meal can cost different amounts depending on where you eat it). Sales taxes frequently change from year to year, also.

      This means that all of the computer systems in the US are set up to deal with variable sales tax, including 0% as in the case of a tourist. This is not the case in NZ where GST is a flat tax on almost everything, so not many systems are set up to handle it properly and do so without corner-cases and errors. This includes front-end PoS as well as back-end accounting software.

      • BLiP 4.1.1

        Think how easy it would be for New Zealand – just one sales tax!

        • BLiP

          Even the poor minimum wage sales people in New Zealand can be taught to deduct 12.5% from a total using the cash register. The tourist just has to show their visa, the number noted down against the total deduction, and wack it into IRD.

  5. indiana 5

    So if you go to Aussie, spend up on clothes for example as they had a bargain/sale at the store, spend over A$300 on one receipt, go to the airport, show them the receipt and clothes, get your tax back, saving evening more money as you brought the stuff on sale anyway is bad thing and can’t be reciprocated in NZ. Nice!

    • BLiP 5.1

      Why complicate the system – just take the 12.5% off at point of sale? Why Brewer would want to employ more public servants seems strange – I wonder what his real game is – wouldn’t be that its been a while since he’s had any publicity, would it?

    • Lanthanide 5.2

      The point isn’t that it’s a bad thing, but that it’ll be a net loss to NZ to make it easy to get money back at the airport.

      If the GST were able to be removed at PoS, as per in the US, having lower prices on things could encourage consumption and end up netting more revenue (for the business, not the government) than otherwise. But because the system necessarily in NZ must be carried out when the tourist leaves, it is highly unlikely their extra savings will be spent in NZ.

      Think about it, if you’re an American tourist and you just got given $200 NZ from GST refunds while you’re at the airport checking out, are you going to go spend that $200 on overpriced airport rubbish (which is probably duty free anyway), or are you going to simply convert it back to US $ and save it?

      • Rex Widerstrom 5.2.1

        If the GST were able to be removed at PoS, as per in the US, having lower prices on things could encourage consumption and end up netting more revenue (for the business, not the government) than otherwise.

        And we don’t do it this way… why? “because our POS software won’t handle it”? That seems lame to me… adding an extra “0%” button is hardly difficult to code.

        When the government lied and raised the rate from 10%, did we hear software manufacturers say “Sorry mate, too hard, you’ll have to leave it at 10”?

        Provided it could be done at point of sale, putting money back into the pocket of the tourist to spend at the next shop, Brewer’s idea seems perfectly logical to me.

        But I’m sure Peter Dunne appreciates The Standard’s support… the more he hands Bill to spend, the more scratches on the tummy he receives. This could put him over the quota and we’ll all get to see that cute involuntary leg jerk.

        • Lanthanide

          I never said it would be difficult to do. It’s just expensive. All the little mom and pop shops that have got PoS systems from who-knows-where, will need to get it updated to support variable tax rates. Of course many of these will probably already support it, but I’m sure not all of them would.

          Also I work in software, developing firmware for routers and switches, so I have an appreciation of how difficult something ‘simple’ like sticking a ‘0% button’ on something actually ends up being in practice. Doing the code itself usually isn’t too hard, but it’s the testing and validation and rolling the update out to the customers that is much easier said than done.

          Then there is the accounting systems also. Granted most decent systems will be able to handle this, but again, not all. Furthermore as it is right now, all sales between businesses incur GST, which the company then has to get a refund back from the government. Introducing a new loophole where GST does not have to be charged up front could open problematic loopholes/abuse.

  6. tc 6

    A man with his future in his hands and his pants around his ankles.

    A reflection of the ridiculous prices Newmarket shops are forced to charge as a result of their high overheads which cammy boy wants the taxpayer to compensate for.

    A natural promotion seeking monkey who obviously woke up and thought gosh I haven’t got my name in the papers lately……this should do the trick…..back to my dolls houses.

  7. Pascal's bookie 7

    FCK in pingback ironically accuses Marty of getting most things wrong.

    The post begins:

    Mayor of Newmarket Cameron Brewer writes in the Herald today that tourists to New Zealand should be able to claim back GST.

  8. Cameron Brewer 8

    Thanks for the feedback.

    Re the GST calculation if you read what I wrote carefully – you’ll see I was going for the savings perception it would create among our tourists. I was not offering up the mathmatical deduction….

    “Suddenly in the eyes of tourists every piece of New Zealand jewellery, sizeable artwork, or designer fashion garment is effectively 12.5 per cent cheaper.”

    Merry Christmas everyone.

    • grumpy 8.1

      Nothing radical in that. In most serious tourist destinations the stores themselves push the GST/VAT rebate scheme. Makes sense for NZ businesses to do the sam,e.

      Tourists can still get it while leaving NZ – just bloody awkward.

  9. Steve 9

    Brewer is the result of todays’ teaching. Variable Arithmetic.
    Even if you get it wrong, it is not your fault.

  10. just grow up 10

    [lprent: distastefully deleted, banned and added to auto-moderation as being a moron unlikely to have anything interesting to say. ]

  11. Jared 11

    It wouldn’t be quite as simple as deducting 12.5% at the PoS, it would need to be an option to embed it in so 12.5% isn’t calculated and “accounted for”. I can see the merit in the idea though. Increased spending by tourists knowing they will get 12.5% back at the airport would increase sales for businesses ultimately flowing through to a more productive retail sector depending on tourist spending behaviour. Greenstone etc a popular tourist gift is quite expensive, surely this is good for business?

  12. diddum 12

    O for awesome Marty. Wicked good article.

Links to post

Recent Comments

Recent Posts

  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Schools back donations scheme for the second year
    More schools have opted in to the donations scheme for 2021, compared to 2020 when the scheme was introduced. “The families of more than 447,000 students will be better off next year, with 94% of eligible schools and kura opting into the scheme,” Education Minister Chris Hipkins said. “This is ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruapehu cycle trails gets PGF boost
    The spectacular Mountains to Sea cycle trail in Ruapehu District will receive $4.6 million in funding from the Provincial Growth Fund for two additional trails, Regional Economic Development Minister Shane Jones announced today. “This is an exciting development for the local community, and one that will provide significant economic opportunities ...
    BeehiveBy beehive.govt.nz
    3 weeks ago